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Aug 04, 2009, 06.51 PM IST | Source: CNBC-TV18

IRB Infra wins Sindhudurg airport bid

IRB Infra has bagged an order for construction of Sindhudurg airport in Maharashtra. Confirming the development, its CMD, VD Mhaiskar, said around Rs 150 crore would be the first development expenditure for the project. IRB Infra was not looking at raising money via an equity issue, he said, adding, “We will fund the SPV via internal accruals.”

VD Mhaiskar, Chairman and Managing Director, IRB Infrastructure Developers

IRB Infrastructure Developers has emerged as a successful bidder for construction of greenfield airport in Sindhudurg, Maharashtra. Confirming the development, its Chairman and Managing Director VD Mhaiskar, said around Rs 150 crore would be the first development expenditure for putting up the airport in place. However, he said the company had not yet decided on partners for the special purpose vehicle (SPV). IRB Infra was not looking at raising money via an equity issue, he said, adding, “We will fund the SPV via internal accruals.”

Here is a verbatim transcript of the exclusive interview with VD Mhaiskar on CNBC-TV18. Also watch the accompanying video.

Q: Take us through this project—the kind of investments that it requires in the first phase and the timeline for this project?

A: We have ventured into airport development and around Rs 150 crore would be the first phase development expenditure for putting up the airport in place.

Q: What is the timeline? By when will you have to complete it and by when we will have to raise this Rs 150 crore and how will you raise it?

A: We have not finalized the plans about raising the money for this project. It would be SPV in which the project will be executed and the SPV will go out and raise the required fund for the project. Our sense is that now that we have received the letter of acceptance, a month or so for filing the agreement and after that around 6-8 months for financial closure and completing other documentation with regard to certain other agreement.

Q: Have you identified any partners for the SPV?

A: No yet.

Q: What is the kind of equity that you will put in anyways?

A: We expect around 60:40 debt equity ratio for this project.

Q: 40 would be the equities so that would be 40% of Rs 150 crore?

A: Yes. That is right.

Q: Offlate you have bagged few projects – in terms of funding requirements going forward, do you have any plans of raising via QIP issue or via any other form of equity?

A: No. We have very strong internal accruals at this point and the entire four orders that we have received or on the verge of receiving with regards to the highway side and this airport, all both put together we will be able to fund this with our internal accruals.

Q: What are the kinds of margins that you are looking at in this project since this is first of its kind – how would you compare to the other toll bought projects that you have?

A: This is more of an asset based project which has a 95 years concession period and the total land parcel that is being handed over is around 650 acres. The numbers I will not be able to put today but one thing I can say is that the airport alone, the airport infrastructure not require more than 350 acres. So the balance property land will be available for commercial exploitations and development. Sindhudurg district has been declared as a tourism district and is the adjoining district to Goa. We also expect to tap the traffic from North Goa from this airport.

Q: How many kilometers is it from North Goa?

A: Around 80 kilometers from the existing airport.

IRB Infra stock price

On October 22, 2014, IRB Infrastructure Developers closed at Rs 246.45, up Rs 4.00, or 1.65 percent. The 52-week high of the share was Rs 275.50 and the 52-week low was Rs 68.05.


The company's trailing 12-month (TTM) EPS was at Rs 8.77 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 28.1. The latest book value of the company is Rs 51.95 per share. At current value, the price-to-book value of the company is 4.74.

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